G7 looks to calm fears over currency war

LONDON: The Group of Seven nations are considering releasing a statement on exchange rates this week to calm concern the world is on the brink of a currency war, three officials from G-7 countries said.

Finance officials from the world's major industrial economies have drafted a text now being reviewed by senior policy makers, one official said on condition of anonymity. The current wording, which still may be changed, contains a commitment to market-set exchange rates and an agreement that governments don't use fiscal or monetary policy to drive currencies, the official said.

Japanese prime minister Shinzo Abe's push for more aggressive monetary policy has raised concern abroad that his government is directly seeking to weaken the yen, something it denies. In the talks, Japan has questioned the statement's contents because it doesn't want to be singled out for criticism, another official from a G-7 nation said, also on the basis they not be named.

The G-7 is looking to release the statement before a February 15-16 meeting in Moscow of finance ministers and central bankers from the Group of 20, which includes the G-7 and emerging markets such as Brazil, China and India.

Any pledge not to target currencies when setting policy would mark a strengthening in stance from when the G-7's finance chiefs last commented on currencies as a group in September 2011. The Wall Street Journal earlier reported the G-7 was debating a statement.

The yen has weakened 13% against the dollar since mid-November in anticipation of monetary stimulus advocated by Abe, who took office in December.

His campaign has drawn statements of concern from Germany to Canada as officials fret a weaker yen could harm their exporters. Canadian finance minister Jim Flaherty last month that he'd spoken to his Japanese counterpart, Taro Aso, to signal his concern.